To understand the regulatory elements which are involved in the initiation of transcription, we have studied a hormonally inducible element which is located on the long terminal repeat (LTR) of the mouse mammary tumor virus (MMTV). Plasmids were constructed that contained the MMTV-LTR upstream from the prokaryotic gene chloramphenicol-acetyltransferase (CAT). After transfection into mouse L-cells, which were then grown in the presence or absence of the steroid hormone dexamethasone, the expression of CAT could conveniently be measured in cell extracts. Cells grown in the presence of dexamethasone produced about 9 times more CAT than hormone-free controls. Sequences of 300 bp or 1050 bp from the 5' end of the MMTV-LTR were deleted by a ClaI or a SacI cleavage, respectively. While the 300 bp deletion still maintained full inducibility, no induction was observed after the deletion of 1050 bp. We are currently investigating a series of exonuclease-generated deletions in order to precisely delineate the nucleotides required for inducibility.